Kodak $500 million convertible talked at 3.375-3.875% yield, up 40-45%

By Ronda Fears

Nashville, Oct. 7 - Eastman Kodak Co.'s $500 million of 30-year convertible notes are talked to yield 3.375% to 3.875% with a 40% to 45% initial conversion premium.

Citigroup and Lehman Brothers are joint lead managers of the deal, which is slated to price in the Rule 144A market after the close Wednesday.

The notes will be non-callable for seven years with puts in years seven, 10, 15, 20 and 25. And there is a 120% contingent conversion trigger.

There is a $75 million greenshoe available.

Concurrently with the convertible sale, Citigroup and Lehman also are jointly managing a straight bond offering by Kodak. Those $500 million in senior unsecured notes will be sold off the company's shelf registration.

Kodak said proceeds from both offerings will be used to repay a portion of its commercial paper borrowings and partially fund its previously announced acquisition of PracticeWorks Inc.

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